Independent Sector Statement on Tax Reform Developments in House and Senate

November 10, 2017

By Independent Sector

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(WASHINGTON, November 10, 2017) – The following statement is from Daniel J. Cardinali, president and CEO of Independent Sector:

“Yesterday, the House Ways and Means Committee completed work on its tax reform legislation, while the Senate Finance Committee released its tax reform draft. Both bills have major implications for the charitable sector.

The House Ways and Means Committee approved an amendment to its final bill that effectively eliminates the Johnson Amendment, a 63-year-old law that protects all charities from partisan politics. This is a full-out assault on the independence and integrity of our sector. The House bill also eliminates the estate tax and severely limits the charitable deduction, ensuring that 95 percent of Americans will be taxed on their charitable donations while only the wealthiest continue to benefit. Independent Sector strongly opposes H.R. 1 because it unravels civil society in America, undercuts charities and their ability to respond to the needs of our communities, and, ultimately, widens the gap between the truly privileged and the rest of society. This bill should be defeated.

We had hoped for better from the Senate bill.

While we are pleased to see the Senate reject the House’s assault on the Johnson Amendment, we are disheartened that the Senate bill, in its current form, limits the charitable deduction rather than expanding it to all taxpayers by way of a universal charitable deduction as we have proposed. This will result in a loss of billions of charitable dollars, charities will provide fewer services, help fewer people, and create fewer jobs.

The bill also limits the estate tax by doubling the current exemption. Independent Sector supports preserving the estate tax at current levels as an incentive for wealthy individuals to give more of their estate to charity.

These and other provisions in the bill foreshadow a troubling transfer of financial, political, and civic power to the wealthiest households. This is setting up a societal imbalance that we cannot allow to occur. The Senate Finance Committee now has the opportunity to correct these problems through the amendment process.

In the days and weeks to come, Independent Sector will continue to work with Congress to ensure that tax reform promotes a vibrant nonprofit sector that’s well equipped to strengthen families, build up our communities, and repair civil society in America.”

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Independent Sector is the only national membership organization that brings together a diverse set of nonprofits, foundations, and corporations to advance the common good. Learn more at independentsector.org.